NUPRC Requests $5,000, Other Conditions to Extend Oil Licence
The Nigerian Upstream Petroleum Regulatory Commission has written to holders of over 40 Petroleum Prospecting Licences, informing them of their PPL tenure expiration and the conditions for extension.
According to the NUPRC, any holder who wishes to apply for an extension must pay $5,000 as an application fee.
In the letter titled, ’Notification of PPL Tenure Expiration And Conditions For Extension’, the Chief Executive of the NUPRC, Gbenga Komolafe, said “Further to the award of a Petroleum Prospecting License to your company during the 2020 Marginal Field Bid Round, a review of our records indicate that the PPL will expire on 27th June 2025 which is in line with the terms of award of the licence.”
In accordance with the provisions of Section 77 of the Petroleum Industry Act 2021 and 2022 Regulation on Extension of Licence, Komolafe said the letter served as a formal reminder that the PPL holders were required to either apply for an optional additional three years exploration period based on fulfilment of Minimum Work Programme/Minimum Financial Commitment attached to the licence at the time of the award and other obligations.
They were also expected to have responded to the June 18 email sent to them by completing and returning the forms attached, before June 23. The affected licensees were told to submit a formal application for the extension of the exploration period of the licence before the expiration of the initial term of the Petroleum Prospecting Licence.
Also, the status of the existing work programme and the level of completion of any minimum work obligation imposed on the block at the time of award must be disclosed. These include “data gathering and evaluation, well re-entry, well test and or completion, drilling of at least one well, and submission of a field development plan.
NUPRC also demanded a comprehensive suite of documents demonstrating the achievement of the work programme, saying the document should indicate all activities carried out by the licensee since the award and plans for the continuation of activities on the asset.
The regulator also sought to see the evidence of incurring the minimum financial commitment. Also, there must be “evidence of submission of work performance guarantee for the initial three-year exploration period, issued by a commercial bank duly licensed by the Central Bank of Nigeria with a minimum credit rating of ‘BBB’ issued by, at least, two rating agencies, one of which must be a rating agency incorporated in Nigeria and registered with the Securities and Exchange Commission.”
Other conditions include “Evidence of incorporation of host community development trust fund, environmental remediation fund and Decommissioning and Abandonment fund. Evidence of payment of concession rental for the licence for the initial three exploratory years. A report in summary form and data of all the exploratory and geological work carried out by the licensee in the licence area.
“A detailed justification for the requested extension, including proposed exploratory and geological work programmes, as well as the outstanding activities to be reclassified and implemented as part of a new work programme during the extension period, with clear timelines. The proposed amount of financial commitment sufficient to fund the new work programme.
“Proposed value of the performance security to guarantee the financial commitment during the proposed extension period. Evidence of payment of five thousand United States dollars application fee.”
The NUPRC had earlier said that several licensees had formally applied for the conversion of their Petroleum Prospecting Licences to Petroleum Mining Leases.
A document by the NUPRC showed that about 40 oil licences would expire this month, except the necessary steps are taken to prevent it.
According to the Nigerian Upstream Petroleum Regulatory Commission’s Upstream Concession Situation Report in June, the licences, which were granted to different companies on June 28, 2022, would expire tomorrow, June 27. They include the petroleum prospecting licences granted to oil companies after the completion of the 2020 marginal fields bid round.
The NUPRC earlier responded that the law provided for an optional extension of three or five years; however, the extension would depend on the company’s performance.
It was shown from the NUPRC data that the licence to operate the Emohua field of OML 22 by EOP Energy will expire this month. EOP Energy comprises Erebina Energy Resources Limited, Omega-Butter Marginal Fields Ltd, and Intessa Energy Ltd. In the same vein, Ardova Plc and Petrodev’s approval to operate the Olua field of OML 25 through Ardogreen Energy will expire at the same time.
Ingentia Energies Limited, made up of Suntrust Oil Company, Petrogas Energy, and Sonora GTP Ltd, may lose the Egbolom field of OML 23 without renewal. Unless renewed, Matrix Energy and Bono Energy Limited’s Atambia E&P will cease to be the operators of the Alamba field of OML 42, while Energia and Annajul Rosari will lose the Irigbo field in the same OML 42.
ENEROG Limited, comprising Energia and Sterov Consortium, may also lose its licence to produce oil from the Ugbo field of OML 40. It was reported that A. A. Rano and Acrete Petroleum’s licence to operate the Oloye field of OML 95 was also affected.
Similarly, Odu’a Investment Company and Pioneer Global Resource & Integrated Energy Ltd may cease to be the operators of the Bita oil field under OML 95 without the approval of the minister. Transit Oil’s Kudo field in OML 89 will also expire in June.
It was also gathered that Deep Offshore Integrated and Virgin Forest E&P’s licence to run the Bime field in OML 49 is included. Platform Petroleum, Shepherdhill, and Nord Oil’s SHN Energy Ltd are currently the operators of the Kurl field in OML 49, but the licence expires soon.
The licence issued to Northwest Petroleum, Genesis Technical, and Gab & Nutella to operate the Ede field of OML 67 under Ede E&P Ltd is also affected. Duport’s Ekpat field in OML 67 is also involved, as well as Oceangate Engineering Oil’s Udara field in OML 70.
Nkuku field of OML 70, being operated by NIPCO E&P, Aries Petroco Resources, Vhelberg E&P, Pathway Universal Investment, Grende Oil, and AMG, is also affected.
According to the document sourced from the NUPRC website, it was stated in accordance with the PIA and other regulations that an application shall be made to the commission for renewal of an oil mining lease or conversion under certain regulations.
